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Bryce wants to renovate his kitchen. The construction estimate is $28,400. He can finance through his local bank or directly through the construction company. The
Bryce wants to renovate his kitchen. The construction estimate is $28,400. He can finance through his local bank or directly through the construction company.
The bank (loan A) offers a maximum 6 year loan at 8% annual interest, resulting in monthly payments of $497.94.
The construction company (loan B) offers a maximum 10 year loan at 5.5% annual interest, resulting in monthly payments of $308.21.
Which loan requires Bryce to pay less, and by how much?
First, calculate the total payback for each loan.
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